More about employee contributions towards health insurance.
One of the great things about a local blog like GraniteGrok is that it gives readers a chance to interact with the thoughts and ideas presented, as well as a new medium to express their viewpoints and observations at the local level. This discussion contributes to the ongoing debate that is absolutely necessary in any self-governing society that claims to be free. An open exchange of ideas is essential to finding the best options to carrying out the mission of any governmental entity.
.
Consider Gilford. After having been told by the budget preparers that the increases in both the town and school budgets are driven by "non-discretionary" costs that cannot be avoided, lo and behold, the budget committee has discovered that in areas like benefits and automatic COLAs, alternative options are, in fact, available. As a matter of fact, it has become obvious, when looking at every other circumstance outside of the public sector, that not only "might" it be done, it "must" be done.
.
The following letter was sent to me in response to the most recent actions by the budget committee in asking employees of the school district to start contributing something to their own health insurance benefit. As I stated above, the points raised will help enhance the ongoing discussion as to the solution to escalating taxes. His letter further reinforces the budget committee's approach...
Dear Mr. Lambert...As a small business owner I wanted to express my views and relay how I choose to deal with the ever rising costs of health care..First some background...I own a small business, K2 Engineering Services Inc www.k2-eng.com and have lived full time in Gilford for the last five years. My company offers a Blue Cross Blue Shield HMO to employees as a benefit. Over the last 10 years the company has paid 100% of the premium for health insurance. In 2005 when the increase of premium notice came (it was to go up 16%) starting 1/1/2006 I gathered my employees together and explained to them that the company cannot continue to pay 100% of the premium for insurance. I told them that I would pay the current 16% increase, but going forward any increases in insurance premiums would be split 50/50 between employee/employer. In this way, year after year I will automatically be able to increase the employee contribution by some amount and everyone knows the rules..In November 2006, we got the premium increase notice which will take effect on 1/1/2007. The premium is up another 17.1%. The total increase per family plan comes to around $155.00 per month. Split 50/50, employees will now be contributing about $18.00 weekly towards the premium. The total annual cost of the plan is now $12,800 with the employer paying $11800 and the employee $1000.00. The employees portion of the premium comes out of their checks pre-tax which lessens the blow by about 25%..Did the employees view this as a pay cut ? Some did but my position is that they in fact received a pay raise of $18.00 per week which is the 50% of the insurance premium that the company pays. To drive the point home, I increased the pay of the three employees who do not get medical insurance by $18.00 per week...very openly I might add. In this way, I am hoping that some may choose to take medical thru a spouse and get the automatic pay increase every year which is independent of any other pay increase. Even if one employee switches off of the company medical plan, the savings are huge..One of the problems with employees is that they do not see the total picture of the cost of benefits and business taxes that the employer pays on their behalf. I have prepared an individual statement per employee that details the specific costs that the company pays for medical, dental, life insurance, short term disability, long term disability, workers comp, fica, medicare, unemployment insurance etc...In some cases the additional expenses approached $24,000 per employee. I believe that employees need to be aware of the costs associated to have them on the payroll..Your work on the Budget Committee is admirable and I hope you find this information useful..Regards, Kevin Keohan
Gilford
Please note that the other members of the budget committee have had a lot to do with the steps we have taken, as well. I thank Mr. Keohan for giving me permission to reprint his well- appreciated letter. His words warrant sharing with my fellow citizens.
